Ethan Allen Interiors Inc (ETD) 2023 Q4 法說會逐字稿

Good afternoon, and welcome to the Ethan Allen Fiscal 2023 Fourth Quarter Analyst Conference Call.

下午好，歡迎參加 Ethan Allen 2023 財年第四季度分析師電話會議。

(Operator Instructions)

（操作員說明）

Please note this conference is being recorded.

請注意，本次會議正在錄製中。

It is now my pleasure to introduce your host, Matt McNulty, Senior Vice President, Chief Financial Officer and Treasurer. Thank you. You may begin.

現在我很高興向您介紹主持人，高級副總裁、首席財務官兼財務主管馬特·麥克納爾蒂。謝謝。你可以開始了。

Thank you, Darryl. Good afternoon, and thank you for joining us today to discuss Ethan Allen's Fiscal 2023 and Fourth Quarter Results.

謝謝你，達里爾。下午好，感謝您今天加入我們討論 Ethan Allen 的 2023 財年和第四季度業績。

With me today is Farooq Kathwari, our Chairman, President and CEO. Mr. Kathwari will open and close our prepared remarks, while I will speak to our financial performance midway through. After our prepared remarks, we will then open the call for your questions.

今天與我在一起的是我們的董事長、總裁兼首席執行官 Farooq Kathwari。 Kathwari 先生將開始和結束我們準備好的發言，而我將在中途談論我們的財務業績。在我們準備好發言後，我們將開始電話詢問您的問題。

Before we begin, I'd like to remind the audience that this call is being recorded and webcast live under the News and Events tab on the Investor Relations page of our ethanallen.com website. There you will find a copy of our press release, which contains reconciliations of non-GAAP financial measures referred to in this release and on this call. A replay of today's call will also be made available via phone and on our website.

在我們開始之前，我想提醒觀眾，這次電話會議正在我們 ethanallen.com 網站投資者關係頁面的新聞和活動選項卡下進行錄音和網絡直播。您可以在那裡找到我們的新聞稿副本，其中包含本新聞稿和本次電話會議中提到的非公認會計準則財務指標的調節表。今天的電話會議的重播也將通過電話和我們的網站提供。

Our comments today may include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a complete review of those risks. The company assumes no obligation to update or revise any forward-looking matters discussed during this call.

我們今天的評論可能包括前瞻性陳述，這些陳述受到風險和不確定性的影響，可能導致實際結果出現重大差異。請參閱我們向 SEC 提交的文件，了解對這些風險的完整審查。該公司不承擔更新或修改本次電話會議中討論的任何前瞻性事項的義務。

With that, I'm pleased to now turn the call over to Mr. Kathwari.

現在，我很高興將電話轉給 Kathwari 先生。

Thanks, Matt. Thank you for participating in our fiscal 2023 and fourth quarter financial and operating results. As we reported, we had strong financial results for our fiscal year and fourth quarter ended June 30, 2023. For the year, sales of $791.4 million, gross margin of 60.7%, adjusted operating income of $133.5 million, which is 16.9% of sales, and adjusted earnings per share of $4.03 compared to $3.93 in the previous year.

謝謝，馬特。感謝您參與我們 2023 財年和第四季度的財務和運營業績。正如我們所報告的，我們截至2023 年6 月30 日的財年和第四季度的財務業績強勁。全年銷售額為7.914 億美元，毛利率為60.7%，調整後營業收入為1.335 億美元，佔銷售額的16.9% ，調整後每股收益為 4.03 美元，而上一年為 3.93 美元。

Our fiscal fourth quarter was also strong with adjusted operating income of $30.6 million for an operating margin of 16.3%. We have continued to generate strong cash, and as of June 30, 2023, had cash and investments of $172.7 million and no debt.

我們的第四財季也表現強勁，調整後營業收入為 3060 萬美元，營業利潤率為 16.3%。我們繼續產生強勁的現金，截至 2023 年 6 月 30 日，擁有現金和投資 1.727 億美元，沒有債務。

We are also pleased that yesterday, our Board approved a regular quarterly cash dividend of $0.36 per share and a special cash dividend of $0.50 per share, both payable August 31. As expected, the focus and very high demand of consumers on the home during the COVID-19 pandemic has moderated. We are well positioned to continue our progress.

我們還感到高興的是，昨天，我們的董事會批准了每股0.36 美元的定期季度現金股息和每股0.50 美元的特別現金股息，均於8 月31 日支付。正如預期的那樣，消費者對家居的關注和需求非常高。 COVID-19 疫情已趨緩。我們處於有利位置，可以繼續進步。

After Matt provides a brief overview of our financial results, I will provide an overview of our focus to continue our strong operating and financial results. Matt?

在馬特簡要概述我們的財務業績後，我將概述我們繼續保持強勁的運營和財務業績的重點。馬特？

Thank you, Mr. Kathwari. As a reminder, we present our financial results on both a GAAP and non-GAAP basis. Non-GAAP results include restructuring initiatives, impairments and other corporate actions and are further detailed in our press release. We believe the non-GAAP presentation better reflects underlying operating trends and performance of the business.

謝謝你，凱思瓦里先生。謹此提醒，我們以公認會計準則和非公認會計準則為基礎呈現我們的財務業績。非公認會計原則業績包括重組計劃、減值和其他公司行動，並在我們的新聞稿中進一步詳細介紹。我們認為，非公認會計原則的演示更好地反映了基本的運營趨勢和業務績效。

Our financial results for the fiscal 2023 full year and fourth quarter ended June 30 are highlighted by strong gross and operating margins, improving lead times from decreasing backlog, disciplined cost and expense controls, strong operating cash flow and a robust balance sheet. As we operate in a post-COVID-19 era, our operations produced strong financial results, which I will now discuss.

我們截至6 月30 日的2023 財年全年和第四季度的財務業績突出表現在強勁的毛利率和營業利潤率、因積壓訂單減少而縮短的交貨時間、嚴格的成本和費用控制、強勁的運營現金流和穩健的資產負債表。由於我們在後 COVID-19 時代運營，我們的運營產生了強勁的財務業績，我現在將對此進行討論。

Our fiscal 2023 consolidated net sales of $791.4 million were lower than last year by 3.2%. Our fourth quarter consolidated net sales totaled $187.4 million, a decrease of 18.4% due to lower delivered unit volume from softening order demand and reduced manufacturing production from lower backlog.

我們 2023 財年的合併淨銷售額為 7.914 億美元，比去年下降 3.2%。我們第四季度的綜合淨銷售額總計 1.874 億美元，下降了 18.4%，原因是訂單需求疲軟導致交付單位數量減少以及積壓訂單減少導致製造產量減少。

Sales in the fourth quarter a year ago set a near record pace leading to a difficult comparison. Compared to the fourth quarter of fiscal 2019, which is pre-pandemic and more reflective of historical norms, our consolidated net sales were up 1.9%. Wholesale segment written orders during fiscal '23 were 9% lower compared to last year, but only 2.1% lower than fiscal 2019. For the quarter, our wholesale orders were down 14.7% to last year and were 2.5% lower than our pre-pandemic fourth quarter of 2019.

一年前第四季度的銷售額創下了接近創紀錄的速度，導致很難進行比較。與疫情爆發前、更能反映歷史常態的 2019 財年第四季度相比，我們的綜合淨銷售額增長了 1.9%。 23 財年批發部門的書面訂單比去年下降 9%，但僅比 2019 財年下降 2.1%。本季度，我們的批發訂單比去年下降 14.7%，比大流行前低 2.5% 2019年第四季度。

Retail segment orders were 12.3% lower in fiscal 2023 when compared to last year, and down 12.5% for the quarter, primarily due to a strong prior year comparable and a reduction of consumer focus on the home. When compared to 2019, retail orders for the full year were up 0.8%, while our quarterly orders were down 1.2%.

與去年相比，2023 財年零售部門訂單下降了 12.3%，本季度下降了 12.5%，這主要是由於上年的可比性強勁以及消費者對家居的關注度降低。與 2019 年相比，全年零售訂單增長了 0.8%，而季度訂單下降了 1.2%。

We ended the fiscal 2023 year with wholesale backlog of $74 million, down 27.7% from a year ago as we were able to reduce the number of weeks of backlog. However, our wholesale backlog still remains higher than pre-pandemic levels, and our teams are effectively managing the business to work through this order backlog and to service our customers.

2023 財年結束時，我們的批發積壓金額為 7,400 萬美元，比一年前下降 27.7%，因為我們能夠減少積壓週數。然而，我們的批發積壓仍然高於大流行前的水平，我們的團隊正在有效地管理業務，以解決積壓訂單並為我們的客戶提供服務。

For the full fiscal 2023 year, our consolidated gross margin was 60.7%, a 140-basis point improvement over last year. In the just completed fourth quarter, consolidated gross margin was 61.5%, our ninth consecutive quarter that consolidated gross margin exceeded 58%. When compared to last year, our quarterly consolidated gross margin was up 330 basis points due to favorable sales mix, disciplined promotional activity and lower input costs including reduced inbound freight and raw material costs, partially offset by lower delivered unit volume. Retail sales, which carries a higher gross margin increased to 83.4% of fourth quarter consolidated sales, up from 82.1% last year.

2023 財年，我們的綜合毛利率為 60.7%，比去年提高了 140 個基點。在剛剛結束的第四季度，綜合毛利率為61.5%，這是我們連續第九個季度綜合毛利率超過58%。與去年相比，我們的季度綜合毛利率增長了330 個基點，這得益於有利的銷售組合、嚴格的促銷活動和較低的投入成本（包括入境運費和原材料成本的減少），但部分被交付單位數量的減少所抵消。毛利率較高的零售額佔第四季度合併銷售額的比例從去年的 82.1% 增至 83.4%。

For the 2023 fiscal year, our adjusted operating margin was 16.9%, a 50-basis point improvement over last year as we carefully managed expenses in the declining net sales environment. Fourth quarter adjusted operating income and margin was 16.3%, down from 18.5% last year due to lower consolidated net sales, higher retail delivery and health insurance costs and new product display, merchandising and sample costs, partially offset by gross margin expansion and our ability to maintain a disciplined approach to cost savings and expense control.

2023 財年，我們調整後的營業利潤率為 16.9%，比去年提高了 50 個基點，因為我們在淨銷售額下降的環境下謹慎管理費用。第四季度調整後營業收入和利潤率為16.3%，低於去年的18.5%，原因是綜合淨銷售額下降、零售交付和健康保險成本以及新產品展示、推銷和样品成本上升，但部分被毛利率擴張和我們的能力所抵消保持嚴格的成本節約和費用控制方法。

Our SG&A expenses decreased 7.6% and equaled 45.1% of net sales, which is an increase from 39.8% last year due to fixed cost deleveraging on lower sales. On a full year basis, adjusted diluted EPS rose 2.5% to $4.03. For the fourth quarter, our adjusted diluted EPS was $0.96 compared to $1.25 last year. Our effective tax rate was 25% for the full year and 23.6% for the fourth quarter, which varies from the 21% federal statutory rate primarily due to state taxes.

我們的 SG&A 費用下降了 7.6%，相當於淨銷售額的 45.1%，比去年的 39.8% 有所增加，這是由於銷售額下降導致的固定成本去槓桿化所致。全年調整後攤薄每股收益上漲 2.5%，至 4.03 美元。第四季度，我們調整後的攤薄每股收益為 0.96 美元，而去年為 1.25 美元。我們全年的有效稅率為 25%，第四季度的有效稅率為 23.6%，這與 21% 的聯邦法定稅率存在差異，主要是由於州稅所致。

Now turning to our liquidity and capital resources. We ended our fiscal year with a strong balance sheet, including cash and investments of $172.7 million as of June 30 and no outstanding debt. We generated $26.3 million of cash from operating activities during the quarter, bringing our total fiscal year amount up to $100.7 million, a 45.1% increase over last year. This growth was driven by strong profit performance and a reduction in inventory carrying levels and accounts receivable, partially offset by a decline in customer deposits.

現在轉向我們的流動性和資本資源。我們以強勁的資產負債表結束了本財年，截至 6 月 30 日，包括現金和投資 1.727 億美元，沒有未償債務。本季度我們從經營活動中產生了 2630 萬美元的現金，使我們的財政年度總額達到 1.007 億美元，比去年增長 45.1%。這一增長是由強勁的利潤表現以及庫存賬面水平和應收賬款的減少推動的，但部分被客戶存款的下降所抵消。

Our inventory levels decreased $27.3 million since the start of the fiscal year as we restore our operating inventory levels to more historical norms as backlog decreases while also ensuring appropriate amounts of inventory are on hand to service our customers.

自本財年開始以來，我們的庫存水平減少了 2730 萬美元，因為隨著積壓訂單的減少，我們將運營庫存水平恢復到歷史標準，同時確保有適當數量的庫存來為我們的客戶提供服務。

Capital expenditures were $13.9 million for the year, including $3.2 million during the fourth quarter as we continue to invest capital in manufacturing, retail, technology and infrastructure. We also continued our practice of returning capital to shareholders in the form of cash dividends. In April, our Board increased the regular quarterly cash dividend by 12.5% to $0.36 per share, which was subsequently paid in May and brought our fiscal 2023 dividends paid total to $46.4 million.

全年資本支出為 1,390 萬美元，其中第四季度資本支出為 320 萬美元，因為我們繼續在製造、零售、技術和基礎設施方面進行資本投資。我們還繼續以現金分紅的形式向股東返還資本。 4 月份，我們的董事會將定期季度現金股息增加了 12.5% 至每股 0.36 美元，隨後於 5 月份支付，使我們的 2023 財年股息支付總額達到 4,640 萬美元。

Also, as just announced in our earnings release, our Board declared a special cash dividend of $0.50 per share in addition to our regular quarterly cash dividend of $0.36 per share, both of which will be paid on August 31. We have paid a special cash dividend each of the past 3 years and have paid an annual cash dividend every year since 1996.

此外，正如我們剛剛在財報中宣布的那樣，除了每股 0.36 美元的常規季度現金股息外，我們的董事會還宣布每股 0.50 美元的特別現金股息，兩者均將於 8 月 31 日支付。過去3年每年派發股息，自1996年起每年派發現金股息。

In summary, our vertically integrated business delivered strong fiscal 2023 operating results during a period marked by industry-wide softer demand and challenging headwinds. We achieved these positive results and generated strong cash flows while protecting our margin gains through disciplined investments and solid execution. As we move into fiscal 2024, we must continue to carefully manage our expense structure while investing in growth initiatives that we believe will further our business.

總之，我們的垂直整合業務在全行業需求疲軟和充滿挑戰的逆風的時期實現了強勁的 2023 財年經營業績。我們取得了這些積極成果並產生了強勁的現金流，同時通過嚴格的投資和紮實的執行保護了我們的利潤收益。隨著我們進入 2024 財年，我們必須繼續謹慎管理我們的費用結構，同時投資於我們相信將進一步推動我們業務的增長計劃。

With that, I will turn the call back over to Mr. Kathwari.

這樣，我會將電話轉回給 Kathwari 先生。

Thank you, Matt. As I mentioned, we and our industry greatly benefited from the consumer focus on the home during the COVID-19 pandemic and as expected, consumer focus is now on many other areas as well. As we noted in our press release, we are very well positioned.

謝謝你，馬特。正如我所提到的，我們和我們的行業在 COVID-19 大流行期間受益於消費者對家庭的關注，正如預期的那樣，消費者現在也關注許多其他領域。正如我們在新聞稿中指出的那樣，我們處於非常有利的位置。

During the last 3 years, we have greatly strengthened our enterprise in several important areas, including the following: strengthening talent. We have strong talent in our various areas from product development, marketing, manufacturing, logistics, retail, technology and operations. Our product offerings and marketing have been enhanced. Our product programs under the umbrella of classics with a modern perspective are being introduced to our network. Our marketing has been greatly expanded, especially utilizing digital mediums.

在過去的三年裡，我們在幾個重要領域極大地加強了我們的企業，包括： 加強人才。我們在產品開發、營銷、製造、物流、零售、技術和運營等各個領域都擁有強大的人才。我們的產品供應和營銷得到了增強。我們將經典與現代視角相結合的產品計劃引入我們的網絡。我們的營銷已大大擴展，特別是利用數字媒體。

The repositioning of our retail network. We are in the process of launching our refreshed projections under the umbrella of interior design destination. Our plan is to complete the launch in our 175 North American design centers during the next 6 months. This provides us great opportunity to reach our clients and is also a strong motivation for our interior design team. As you know, we have the largest interior design network. We are pleased and honored that last week in a study by Newsweek, we were named 1 of America's top 10 retailers, including recognition as #1 retailer in the premium furniture category.

我們的零售網絡的重新定位。我們正在室內設計目的地的保護下推出更新的投影。我們的計劃是在未來 6 個月內完成在 175 個北美設計中心的發布。這為我們提供了接觸客戶的絕佳機會，也是我們室內設計團隊的強大動力。如您所知，我們擁有最大的室內設計網絡。我們很高興也很榮幸，在上週《新聞周刊》的一項研究中，我們被評為美國十大零售商之一，包括被評為高檔家具類別第一名零售商。

Continued strengthening of our manufacturing and logistics. We have continued to invest in our 10 North American manufacturing operations, which produced about 75% of our products with 75% of them custom. Our national and retail logistics continue to be enhanced. We provide excellent and consistent service at 1 delivered price to our customers throughout North America.

持續加強我們的製造和物流。我們繼續投資於北美的 10 個製造工廠，這些工廠生產我們約 75% 的產品，其中 75% 是定制產品。我們的全國和零售物流繼續得到加強。我們以 1 個交貨價格為整個北美地區的客戶提供優質、一致的服務。

Technology, our focus and continued investments in technology have been a game changer both in providing excellent interior design service, combined with technology and in the efficiency of our manufacturing and logistics operations.

我們對技術的關注和對技術的持續投資改變了遊戲規則，無論是在提供卓越的室內設計服務、技術相結合還是在我們的製造和物流運營效率方面。

And finally, we remain focused on being socially responsible as it is an important part of our business, our culture and to the communities in which we serve and operate in. As we mentioned in our press release, we remain cautiously optimistic.

最後，我們仍然專注於承擔社會責任，因為這是我們業務、文化以及我們服務和運營所在社區的重要組成部分。正如我們在新聞稿中提到的，我們保持謹慎樂觀。

Operator, we are now pleased to open the call for any questions and comments.

接線員，我們現在很高興撥打電話詢問您的任何問題和意見。

(Operator Instructions) Our first questions come from the line of Brad Thomas with KeyBanc Capital Markets.

（操作員說明）我們的第一個問題來自 KeyBanc Capital Markets 的 Brad Thomas。

Brad, is it you?

布拉德，是你嗎？

It is me here. Yes.

是我在這裡。是的。

Good to hear you, Brad, after some time. And you are doing well?

很高興聽到你的聲音，布拉德，過了一段時間。你還好嗎？

I'm doing well, I'm thrilled to not have another earnings conflict here during this call today. So good to hear you live, Farooq.

我做得很好，我很高興在今天的電話會議中沒有再次出現收入衝突。很高興聽到你的現場直播，法魯克。

Well, thanks for all the prepared commentary. I was wondering if you could talk a little bit about the cadence of the business from a written perspective, with a little bit of a slowdown from what you posted in the March quarter. I was wondering if you could talk about some of the dynamics behind that? Did you change at all? How promotional were you? Is it getting more competitive? Did the consumers seem to just pause and how you're thinking about the cadence of orders as we look forward here?

好吧，感謝所有準備好的評論。我想知道您是否可以從書面角度談談業務節奏，與您在三月份季度發布的內容相比略有放緩。我想知道您能否談談這背後的一些動力？你完全改變了嗎？你的促銷力度如何？競爭越來越激烈了嗎？消費者是否似乎只是暫停了，您如何看待我們在這裡期待的訂單節奏？

Yes. As we mentioned that we were operating in the last 3 years at very, very high levels of orders coming in. Consumers interest was tremendously great. And now it has come back to somewhat, you might say, normal, which is, as Matt also mentioned, we look at our fiscal 2019 as the base year prior to the COVID. And based on that, we are still holding up pretty good.

是的。正如我們提到的，過去 3 年我們的運營訂單量非常非常高。消費者的興趣非常濃厚。現在，你可能會說，它已經在某種程度上恢復正常，正如馬特也提到的那樣，我們將 2019 財年視為新冠疫情之前的基準年。基於此，我們仍然保持得很好。

Our backlogs are still higher than what we had in 2019. And where the positive thing has been that we have been able also to become more efficient at all levels. And for instance, that the role of technology has just been amazing of the efficiency it has brought in and the productivity it has brought in both at our manufacturing and at our retail levels.

我們的積壓訂單仍然高於 2019 年。積極的一點是，我們在各個層面都提高了效率。例如，技術的作用令人驚嘆，它為我們的製造和零售層面帶來了效率和生產力。

Today, we have most likely -- when you go back to 2019, we have many -- much less -- many less interior designers doing more business because of the fact of technology. Similarly, our manufacturing, 25, 30 years back with 30 manufacturing plants. Today, we have 10 and they're operating extremely efficiently and effectively because of the combination of obviously good talent, but also technology.

今天，當你回到 2019 年時，我們很可能有很多——更少——更少的室內設計師因為技術的原因而做更多的生意。同樣，我們的製造業在 25、30 年前擁有 30 家製造工廠。如今，我們有 10 家，他們的運營非常高效且有效，因為他們不僅擁有優秀的人才，還擁有技術。

So I would say that our business is obviously moderated. But as you can see, despite the fact we had lower sales than last fiscal year, our gross margins improved, and our operating income also improved. So we will continue to see us operate more efficiently and effectively, both at a gross margin level and the operating income level.

所以我想說我們的業務顯然受到了監管。但正如你所看到的，儘管我們的銷售額低於上一財年，但我們的毛利率有所提高，我們的營業收入也有所提高。因此，我們將繼續看到我們在毛利率水平和營業收入水平上更加高效和有效地運營。

And that's a great segue to my follow-up question there. The gross margin, obviously, very strong. I know some of that is a function of channel mix and on where the sales come from. But how are you all thinking about the puts and takes on gross margin as we think about the next year?

這是我接下來的問題的一個很好的延續。顯然，毛利率非常高。我知道其中一些是渠道組合和銷售來源的函數。但是，當我們考慮明年時，你們如何看待看跌期權和看跌期權的毛利率？

I think that the -- obviously, the gross margin is impacted by the amount of production and sales. We run -- we are a vertically integrated company. We have manufacturing. And obviously, our manufacturing benefits with higher volumes and on the other hand, if had lower volumes, the manufacturing does have a negative impact on gross margins.

我認為，顯然，毛利率受到產量和銷量的影響。我們經營——我們是一家垂直整合的公司。我們有製造業。顯然，我們的製造會因產量增加而受益，另一方面，如果產量較低，製造確實會對毛利率產生負面影響。

So those are issues from the perspective of gross margins. Having said all of those things, I think that more or less where we are, we are -- we expect to remain -- that's what our expectation is to remain at the level we are because of the efficiencies that we have brought in.

所以這些都是從毛利率角度來看的問題。說了所有這些事情后，我認為或多或少我們現在所處的位置——我們期望保持——這就是我們的期望是保持在我們現在的水平，因為我們帶來了效率。

I appreciate it.

我很感激。

All right. Thanks very much. Good to hear your voice. Now this is -- I tell you that the folks don't completely know it, but I think you were there 30 years back when we took this company public, correct?

好的。非常感謝。很高興聽到你的聲音。現在，我告訴你，人們並不完全了解這一點，但我認為 30 年前我們將這家公司上市時你就在場，對嗎？

Not quite that far. Going through the great financial crisis, but not quite that far. Yes.

還沒有那麼遠。正在經歷巨大的金融危機，但還沒有那麼遠。是的。

Okay, you're still young. All right.

好吧，你還年輕。好的。

All right, Darryl, please go ahead.

好吧，達里爾，請繼續。

Our next questions come from the line of Cristina Fernández with Telsey Advisory Group.

我們的下一個問題來自特爾西諮詢小組的克里斯蒂娜·費爾南德斯。

I wanted to follow up on Brad's question around demand. Can you comment on, I guess, how volatile are these trends? Are you seeing like similar trends from week to week or month to month? Or is there a lot of volatility in the market? And I was also curious what you're seeing in ticket versus traffic, are -- is ticket outpacing traffic?

我想跟進布拉德關於需求的問題。我想您能否評論一下這些趨勢的波動性如何？您是否每週或每月都看到類似的趨勢？還是市場波動很大？我也很好奇你在門票與交通流量方面看到的情況是——門票數量超過了交通流量嗎？

Yes, it's a good question. It's an interesting time we are living in, that this past -- this summer, we have seen the impact of people going on vacations, not staying in their home, quite different than a year back. So I think what we're seeing -- I think if we look at it, we have seen more of an impact this summer of people doing other things. And also the fact remains that a lot of people did buy products for their home.

是的，這是一個好問題。我們生活在一個有趣的時代，去年——今年夏天，我們看到了人們去度假而不是待在家裡所產生的影響，這與一年前有很大不同。所以我認為我們所看到的——我想如果我們仔細觀察的話，我們會看到今年夏天人們做其他事情所產生的更多影響。事實上，很多人確實為自己的家購買了產品。

So I would say that our perspective is that as this summer time ends that people will -- we expect people to go back to the normal levels of coming into our design centers, perhaps not as high as we saw in the last 3 years. But I would say that our expectation is we should do better in traffic than we did in the pre-COVID area.

所以我想說，我們的觀點是，隨著今年夏天的結束，人們會——我們預計人們會回到進入我們設計中心的正常水平，也許不會像我們過去三年看到的那麼高。但我想說的是，我們的期望是我們應該在交通方面做得比新冠疫情之前的地區更好。

And then I had another question on the -- also on the gross margin, how much of a benefit are you seeing from input costs, whether it's transportation, freight and raw materials year-over-year?

然後我還有一個關於毛利率的問題，您從投入成本中看到了多少收益，無論是運輸、貨運和原材料同比？

Yes. I mean, the -- our gross margins and operating margins are both -- 2 important areas, which are impacted both by the impact of freight coming in, our -- and also the delivery of our products. Keep in mind, as I mentioned, that we deliver our products at 1 price throughout the United States and also throughout Canada.

是的。我的意思是，我們的毛利率和營業利潤率都是兩個重要領域，它們既受到貨運的影響，也受到我們產品交付的影響。請記住，正如我所提到的，我們在美國和加拿大各地以 1 的價格交付我們的產品。

So in the last 3 years, the transportation cost of delivery in the United States was extremely high. The cost of delivery of a container, let us say, from Indonesia or East Asia to the United States had gone from $3,000 to $30,000. It's come back. Our costs in the United States were also very high at the retail level because of the domestic transportation. Our cost of sending a trailer from east to the west had tripled, it's coming back to the normal levels. To answer your question, I think that we are having a positive impact on our margins both as a retail and at the manufacturing level due to reduction of costs.

所以最近3年，美國的配送運輸成本是非常高的。比方說，從印度尼西亞或東亞到美國，一個集裝箱的運輸成本已從 3,000 美元增至 30,000 美元。它回來了。由於國內運輸，我們在美國的零售成本也非常高。我們從東到西運送拖車的成本增加了兩倍，現在正在恢復到正常水平。為了回答你的問題，我認為由於成本的降低，我們在零售和製造層面都對我們的利潤產生了積極的影響。

Also, our -- we are a manufacturer. Lumber costs have gone up very, very high. Then I'll come back to the pre-COVID levels. So on 1 hand, we are going to be impacted with the impact of somewhat lower deliveries. But on the other hand, we are benefiting from the lowering of the costs, whether it is of raw materials or freight. Both to our manufacturing and to our retail because as you -- part -- a lot of our freight goes into our operating expenses; some it goes to our cost of goods that portion that goes into our manufacturing side.

另外，我們是一家製造商。木材成本上漲非常非常高。然後我會回到新冠疫情之前的水平。因此，一方面，我們將受到交付量下降的影響。但另一方面，我們也受益於成本的降低，無論是原材料還是運費。對於我們的製造和零售來說，因為作為您的一部分，我們的很多運費都進入了我們的運營費用；有些涉及到我們的商品成本，而涉及到我們製造方面的部分。

That's helpful color. And then the last question I had was on the store refreshes, how many have you done so far? I know you did the Danbury store at your headquarters. And those that have been completed, how are they performing relative to the rest of the chain and the ones that have not been touched?

這是有用的顏色。然後我問的最後一個問題是關於商店刷新的，到目前為止你做了多少？我知道你在總部開設了丹伯里商店。那些已經完成的項目，相對於鏈條的其餘部分和尚未觸及的項目來說，它們的表現如何？

Yes, it's a very, very important and good question. I believe you came to the Danbury design center; you saw it. We are in the process right now. We have not completed any as yet completely, but they're all in the process of getting completed. And I would say the process of getting them completed because it needed products. It needed also the work in each of the design centers, needed painting, some electrical work, and all those kinds of things. That is being done right now.

是的，這是一個非常非常重要且很好的問題。相信您來到了丹伯里設計中心；你看到了。我們現在正在處理中。我們還沒有完全完成任何一項，但它們都在完成的過程中。我想說的是完成它們的過程，因為它需要產品。它還需要每個設計中心的工作，需要油漆，一些電氣工作，以及所有這些事情。現在正在這樣做。

At this phase, we are in the process of updating the interiors and in some cases, the exteriors of our design centers and starting in about, I would say, 4 to 6 weeks, they will start getting products, which is being made and getting ready. So as I said, within 3 to 4 months, most of the design centers would have received the product. And the objective is, which is something that we couldn't have said that 5 years back that the interior projection that you saw in Danbury is the projection that we're going to have nationally in 175 design centers.

在這個階段，我們正在更新設計中心的內飾，在某些情況下，還更新外觀，我想說，大約 4 到 6 週後，他們將開始獲得正在製造和獲得的產品。準備好。所以正如我所說，在3到4個月內，大多數設計中心都會收到產品。我們的目標是，5 年前我們無法說您在丹伯里看到的室內投影就是我們將在全國 175 個設計中心進行的投影。

The other reason that we are able to do it today is that technology has played a tremendously important role. In the past, we had to have the product in the design center or the store for people to see. Today, with our digital technology and virtual reality, our designers can develop and they do develop designs for the consumer with all kinds of colors and design and products. That is a game changer.

我們今天能夠做到這一點的另一個原因是技術發揮了極其重要的作用。過去，我們必須把產品放在設計中心或商店裡給人們看。今天，借助我們的數字技術和虛擬現實，我們的設計師可以開發並且他們確實為消費者開發各種顏色、設計和產品的設計。這是一個遊戲規則的改變者。

So to answer your question, I think you'll start seeing it in the next 2 to 3 months, the process will start, and our objective is most of them will be completed in about 6 months.

因此，為了回答你的問題，我想你會在接下來的 2 到 3 個月內開始看到它，這個過程將會開始，我們的目標是其中大部分將在大約 6 個月內完成。

All right. Thank very much. And any other questions or comments?

好的。非常感謝。還有其他問題或意見嗎？

Thank you. I see no further questions in the queue. So I'll hand the call back over to Farooq Kathwari for any closing comments.

謝謝。我在隊列中沒有看到更多問題。因此，我會將電話轉回給 Farooq Kathwari，以徵求結束意見。

All right. Darryl, thank you, and thank you, everybody, for being on the call. We -- these are interesting times, and the good news is that we are very, very well positioned and we look forward to continuing our progress and our growth.

好的。達里爾，謝謝你，也謝謝大家參加電話會議。我們——這是一個有趣的時代，好消息是我們處於非常非常有利的位置，我們期待繼續取得進步和成長。

So thank you very much for participating in this call.

非常感謝您參與本次電話會議。

Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

謝謝。今天的電話會議到此結束。我們感謝您的參與。此時您可以斷開線路。享受你一天剩下的時間。